Tuesday, October 2, 2012

The Materialist Version Of History

Naked Capitalism posted a video of Michael Hudson and L. Randall Wray recently. It's a long video, but worth watching in full if you can. Hudson is more understandable here than in many of his talks (for dummies like me) and he's got his economic historian hat on. NC transcribed some of the good bits talk, so I've included them below:
Of Sumer:

[HUDSON 52:10] The original money was a price schedule to enable pepole to pay in kind. And the barley, obviously people did not go around with barley in their pocket because it really doesn’t last very well. People didn’t use money, actually to pay. What they would do during the crop year, they would so essentially what somebody would do in a bar today: They’d run up a tab. And they would run up a tab with the ale women for money that would be due on the threshing floor at the seasonal harvesting time. And in fact almost all the barley debts, and we have the contracts from Mesopotamia were due on the threshing floor at barley time, the silver debts were due at another time, and this was the principal [sic] that lasted until about 1200BC.

Time passes, there is a dark age, and until 750BC we to Greece and Rome.

[HUDSON] That’s when civilization began to go down hill. It’s usually considered the start of Western civilization, but what people think is the start of Western Civilization was the falling apart of Near Eastern origins of civilization, of this economy that had been put together in a very well-organized economy, and all of a sudden instead of the public institutions, you had local chieftains occurring, and in Rome, very soon you had the aristocratic families overthrow the kings, and the functions that were in the public sector in the Near East all of a sudden were taken over by private families — let’s call them the Mafia, because that’s basically what the Roman oligarchy was.

And there was a complete change in policy from the Near Eastern Bronze Age to classical antiquity: When a new ruler would come to the throne in Mesopotamia, the first thing they would do, on their first full year on the throne, was to proclaim a clean slate. And that’s because a lot of the debts that were denominated in barley couldn’t be paid. …

And there was a general understanding that the debts tended to grow faster than the means to pay. … [Scribes] had two basic contrasts: The doubling time of debt. …You knew here’s this exponential curve of debt, very rapidly. [T]hey also had curves for the growth of herds, and output, and that was an S curve, just like economics textbooks today …

So the rulers, when they came in, would cancel the debts for a very good reason. … One of the Roman historians was given an explanation by the Egyptians for why the Phatroahs cancelled the debts: They said, if we don’t cancel the debts, then the debtors are going to fall into bondage to the creditors… and then nobody’s going to fight in the army and we’ll be defeated. …

What happened by the time of Rome in 133BC is that you had a Milton Friedman philosophy of free markets by the oligarchy. What they realized, in Rome, was exactly what President Nixon and Hnery Kissinger realized in Chile: You can’t have a free market for creditors if you don’t murder everyone who disagrees with you [laughter]. If you don’t kill everyone who wants to cancel the debts, if you don’t kill everyone one knows history, if you don’t kill the labor leaders, you can’t have a free market, oligarchy style. … So there was a 100 year social war in Rome, and the result was the by the time the empire got going, one quarter of the population was in debt bondage or outright slavery.
So much for progress.

And incidentally, if you want to know how that 100 year civil war played out, check out this show: Dan Carlin's Hardcore History. I just discovered this podcast, and have been in love with it ever since. There’s about fifteen hours on the fall of the Roman Republic, and it’s not as dull as you might imagine.

If that's not enough economic history for you, Economist's View has a post about economic scholarship in Ancient Greece and China:
In Athens from the 7th to the 6th century BC, the middle and lower class, which engaged in commerce and industry, gradually gained its status, becoming a threat to the aristocrats who depended on farming. Also in China there was a deep-rooted idea that agriculture is primary and commerce and industry are secondary. ... Contempt for commerce and industry, as in Greece, started ... when commerce and industry started growing.

It is noteworthy, however, that in China scholars who defended commerce and industry also emerged. Actually it is surprising that such scholars are not known in Greece. ...

A. Confucius
Confucius argued for income equality: “I hear that the man who governs a nation and the man who governs home are more concerned with inequality than scarcity, more concerned with anxiety than poverty.”
B. Guan Zhong
Guan Zhong was a financial adviser to Lord Huan of Qi (?—643). Scholars belonging to the Guan Zhong school kept publishing works in the name of Guan Zi up to the days of Emperor Wu of Early Han.
Guan Zhong believed the four classes should live in separate areas, warriors near the army, farmers near the farm, craftsmen near the government agencies, and merchants near the market. He also believed the four classes should be hereditary in principle, although he would allow an exceptionally stout farmer to be a warrior. ...

He feared the antagonism between the rich and the poor: “When the income inequality exceeds a limit, everything is lost.” (“Five Aids”). Plato said a similar thing in The Laws (744D). Guan Zhong tried to solve this problem by the government’s direct buying selling and its price policy. He encouraged trade across nations. “Show hospitality to the surrounding nations.” (“Book of Questions”) “Please build guest houses for foreign merchants.” (“Gravity Part B”).
Much more at the original link.  Speaking of China, here's an old bookmark (see especially the fifth paragraph):
The French Revolution (1789-1799) was not a revolt of the peasants against the landed aristocracy. It was a violent process by which the bourgeoisie used the disenchanted peasantry to gain control of the power levers of the state from the aristocracy.

The rise of the bourgeoisie as the middlemen to carry out trade in an expanding market economy forced the aristocracy to transform from its traditional role as a benign, even benevolent, feudal ruling class to an increasingly exploitative class to make up for the lost wealth, siphoned off by the trading bourgeoisie. The accumulation of wealth by the bourgeoisie came from the backs of the peasant.

Had the French monarchy during the revolution sided with the bourgeoisie against the aristocracy as its British counterpart had done, France could well be a capitalist constitutional monarchy today. Louis XVI failed to understand that the political raison d'etre for monarchism rests in its mandate of exercising state power to maintain socio-economic equity in the nation by protecting the peasants from the aristocracy.
As the French bourgeoisie gained control of state power after the French Revolution, much of Europe adopted economic and political systems in which the bourgeoisie lorded over the proletariat with a new exploitative regime to replace the previous relatively benign, symbiotic arrangement between the landed aristocracy and the tenant peasantry under agricultural feudalism. As a result, the need for a universal class struggle emerged between workers and capitalists in industrialized Europe.

But much of the world outside of Western Europe was still operating on agricultural feudalism, which became a ripe target for Western imperialism born of the rise of European capitalism. The landlord class of these feudal agricultural countries, in order to resist the encroachment of Western imperialism as an advance stage of industrial capitalism, was forced to shift from the traditional symbiotic relationship with their landless peasants that had produced prosperity, as it had been in China the Tang dynasty in the 8th century, to a new relationship of ruthless exploitation to make up for the lost wealth being siphoned off by Western imperialism, and to form alliance with an emerging national bourgeoisie to oppress a small growing working class in newly established national industries.

In China, as in many other Asian societies, including Japan, the disappearance of a harmonious symbiotic socio-economic structure caused Confucian feudalism to collapse from its cracked foundation, heralding two centuries of cultural decline that pushed a once glorious civilization into temporary relative backwardness in comparison to the advanced Western world. In Japan, nationalists sought solution in fascist militarism in the first half of the 20th century. In China, liberation came in 1949 the form of socialist revolution after a protracted six-decade long struggle.
And see this list of underrated historical fact people want included in a BBC history documentary: 10 things readers want in a history of the world.

I like the inclusion of the Haber-Bosch process and double-entry bookkeeping. I would add uniform weights and measures, coinage and paper money. Lewis Mumford singles out the clock as a foundational invention for capitalism (via the measurement and partitioning of time itself), as well as glass making. He also has an interesting idea about how the spread of the money economy in the Renaissance paved the way for scientific thinking. It makes sense – for the first time you’re seeing actual objects in the real world as abstract, fungible, numerical values that behave according to predictable laws, just like you do with scientific inquiry. And thanks to Leonardo of Pisa, who popularized  the Arabic numeral system for bookkeeping purposes in 1202, you’ve got the analytical tools to perform those abstractions. Finally add the atomism theories of the Greek philosophers rescued by the Arabs and you’re off to the races. Mumford notes that Isaac Newton worked for the Royal Mint. Mumford omits, though, that Copernicus also wrote extensively on monetary systems, and even spent time as a finance minister.

It’s amazing how many of the things that influence history the most are inventions rather than events. The materialist view of history seems to be in ascendance over the “one damn thing after another” school or the “great man” school. Over the years my view of human history has become a lot more materialistic the more I learn and study  - it is primarily human invention and the environment that drive history; the “great men” of history only seem to be in the driver’s seat when actually they are along for the ride. Consider:
  • Would Egyptian civilization have been possible without the regular flooding of the Nile? Would any civilization be possible without domesticated grasses? How much did the quantity of domesticable crops and animals in the Old World contribute to their domination of the New a la Jared Diamond?
  • Did a volcanic eruption doom Minoan civilization? How much did drought and climate change influence the fall of the Roman Empire? The Mayans? The Khmer? Others?
  • How did events like the Little Ice Age and the Black Death affect European history and the advent of Capitalism and the Industrial Revolution? Were cooling periods caused by mass die-offs in Central Asia (Mongol invasions) and the New World (European diseases)?
  • Were the Crusades a result of European overpopulation as a result of a miniature agricultural revolution (three-field crop rotation, horse collar, horse shoes, cover crops, moldboard plows, dredging, etc.)? Would capitalism have come about had Europeans not acquired a taste for exotic goods (silk, cloves, pepper, ivory, pearls, coffee, tea, sugar) thanks to the Crusades?
  • How effective would the Mongols have been without the stirrup and composite bow, not to mention the domestication of the horse? How much did their environment influence these things?
  • What impact did the invention of the printing press have on the spread of Protestantism?
  • Did the use of gunpowder kick off an age of centralization of royal power in Europe, as mass armies could now conquer and occupy large cities? Would Columbus have sailed when he did if the Turks did had not conquered Constantinople, largely due to the use of gunpowder?
  • What if the Chinese had landed in America instead under Admiral Zheng He who was sailing at about the same time with superior ships and technology? How much does European geographical closeness to America matter?
  • How much have crops like maize and potato contributed to the growth of population and the global economy? What about New World silver?
  • Was the French Revolution caused by a volcanic eruption? Could Napoleon have risen to power if the old royal office corps had not been overthrown by the Revolution leading to a lack of qualified commanders and the rise of a meritocracy?
  • How much was the American Revolution exacerbated by mercantilist policies? The British passed laws preventing the colonists from using their land as they saw fit because they needed the raw materials, including old-growth trees for masts in their ships because Britain and Ireland had been almost totally deforested.
  • Would China have been the first to industrialize if they had easier access to coal the way Britain did? Did the Classical World not industrialize because of slavery even though they had invented rudimentary steam engines and computers?
  • How much did “processed” crops like sugar, cotton and tobacco contribute to the rise of the slave trade? What about depopulation of the original inhabitants thanks to smallpox and malaria?
  • Would the modern nation state have emerged without mass communication (telegraph) and transportation (railroads)?
  • How much do genetic differences account for history?
And you can just go on all day long. And if that’s still not enough, here’s an old one from Richard Heinberg: Economic History in 10 Minutes. And don't forget Connections.

4 comments:

  1. great post! I've been following your blog for a while - thank you so much for all the interesting links!

    An interesting speculation:

    Archaeologists found that the docks at the port of Acre were longer during the crusades period than they were during the byzantine period, apparently because of changes in sea level. During the byzantine period there seemed to have been a general warming, causing the sea levels to rise, while there seems to have been a cooler period during the crusades causing the sea levels to fall. Interestingly, the warmer period corresponds with the Arab conquests and the spread of Islam, suggesting that desert tribes migrated northwards, while the migration of Europeans southwards during the crusades seems to indicate that one of the driving factors was the attempt to migrate to a warmer climate during the cold period.

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  2. I've been considering the possibility that the main reason the Chinese didn't colonize as widely as Europeans is because their ethical understandings were superior, overall.

    Indeed, overpopulation of Europe. That drive to compete has been so unrelenting that people have behaved almost roboticly to nature's programming.

    I tend to focus on the overpopulation point of the triangle of causes of our ecological overload. I think this blog has been correct, too, in its focus on the greed aspect, and some what on the third point, which is, lack of knowledge and understanding about important things (by the world). In summary, I see the three problems limiting overall human quality of physical life as overpopulation, greed, and lack of proper knowledge.

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    1. "Overpopulation, greed, and"...ignorance. There, a slogan version that works.

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  3. This comment has been removed by the author.

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